Weekly Report 03/01 -07/ 01/ 2011

Just a very few pips separated between the royal pair and the suggested technical target of the butterfly pattern over four hour interval-click on the previous report-. This technical objective represents the PRZ of the pattern and that is why the pair moved to the downside after touching it. Now, the bigger daily time frame offers a classical probability for forming a reversal classical pattern-inverted head and shoulders- with a broken neckline, while being supported by SMA 50 and MACD indicators, where the pair is presently achieving the retesting action for the broken neckline. Thereby, the bullishnesswill bein favor during this week, while the projected technical objective of this classical overview is seen clearly on the graph.

The trading range for this week is among the key support at 0.8325 and key resistance now at 0.8770.

The general trend over short term basis is to the downside, targeting 0.7780 as far as areas of 0.8965 remain intact.

Previous Report

RecommendationBased on the charts and explanations above our opinion is, buying the pair around 0.8525 targeting 0.8700 and stop loss below 0.8390 might be appropriate.